FBT is a complex and often poorly managed tax obligation
In our experience, even the largest corporates make fundamental errors in managing their FBT obligations.
Your FBT questions
If you have ever considered any (or all) of the following questions, then contact us for assistance. If you would like to keep up to date with the latest FBT news or have further questions please visit our news pages.
Each year when we lodge our FBT return, we are never sure if we have paid too much or paid too little?
This is a common question. We can help you identify the areas of concern and explain the basis on which your FBT liability has been calculated and paid.
Which valuation method should I use?
Most fringe benefits, and certainly some of the key benefits like cars, car parking and meal entertainment, can be valued in a number of ways. Depending on the valuation method used, this can significantly vary the amount of FBT payable and the documentation required.
What exemptions or concessions can I claim?
The FBT legislation includes a large number of exemptions and concessions. These can significantly reduce your FBT liability.
Will I be audited?
The threat of audit always exists. It is important to understand when you may be exposed. It is also important to understand the ATO areas of focus.
Why is my FBT liability so high?
If you believe that your FBT liability is too high, then we can help explain why and assist you in considering reduction mechanisms.
Should I offer flexible Salary Packaging arrangements to employees?
Salary Packaging remains an attractive proposition for both employees and the employer. It is important to have the correct processes and policies in place to support salary packaging arrangements.
Can I claim the minor benefits exemption?
With the increased threshold to $300 (including GST), there has been increased awareness of this exemption. This is especially true when considering Christmas Parties and small gifts. Care needs to be taken when claiming this exemption.
Is my employee eligible to receive a Living Away From Home Allowance?
Before agreeing to pay a Living Away From Home Allowance (LAFHA), careful consideration is required of the employee’s personal circumstances. With proper structuring, a LAFHA delivers significant tax benefits to the employee. A wide range of exemptions and concessions may apply to employees who are Living Away From Home or relocating, whether temporarily or permanently. We strongly recommend that you request advice when considering payment of a LAFHA or relocating employees.
We struggle to understand when an expense is an entertainment expense or a business expense?
Often there is no tax distinction between an entertainment expense and a business expense. The tax implications of food and drink and entertainment expenses are complex and require careful consideration.
Are team building or team bonding activities subject to FBT?
This question is usually asked “after the event” and in most cases after considering the facts, we respond that FBT does apply. With some upfront planning, the FBT cost may be minimised.
Should our people maintain travel diaries?
In certain circumstances travel diaries need to be maintained.
Our employees do not complete their expense claims correctly and are always losing or not obtaining receipts / tax invoices?
It is important to obtain the correct documentation for tax purposes. To support this requirement, it is necessary to have the rights policies and processes in place, coupled with the availability of adequate training.
We regularly receive queries from our employees regarding the calculation of their reportable fringe benefits (RFB) amount. Upon further investigation we find errors and end up amending the FBT return?
Since the introduction of the reportable regime in 1999, many businesses have struggled with the practical and technical requirements. This can lead to unnecessary tension between the employer and employees (and sometimes ex-employees).
Each year we prepare our FBT return based on the prior year’s FBT return file. Is this an effective method for preparing the annual FBT return?
This is a commonly asked question and something we observe regularly. We can assist you in developing a more effective method in preparing your FBT return.